SW Florida homeowners wishing to sell often find out they don’t much like the number they can sell their property for. Some sellers want more money, or simply owe more than the property is worth, so to protect their investment, cash flow, and good credit, they opt for renting instead of selling in a down market.
Renting sounds like the perfect solution, until they speak with a rental agent. Thousands of other frustrated owners have also faced this decision, and have flooded the rental market. Rents have gone down significantly in SW Florida, to the point where it barely covers just the property taxes and maintenance fees and leaving little to cover the actual mortgage.
I spoke with a seller today who just closed on a condo he owned and took a $60,000 loss. He said rents in that community went down from $1200-$1300 to $800/month.
I know of some downtown river district condos that were purchased for $800,000 and are renting for $1,350/mo. This does not cover the mortgage, and wouldn’t even cover the maintenance fees and property taxes either. Some owners are glad to cover whatever expenses they can, while other investors cannot absorb a negative cash flow.
The other thing sellers may wish to consider is what are their expectations after they lose money for a year. Even if the property is still in perfect condition, will prices be the same, more, or less than they are now. Nobody knows this answer for sure, and it most likely depends on what typre of property you have and the price point.
Some investors have come to the sad conclusion that it’s best to bite the bullet today and sell now, if they’re financially able. Whatever you decide, consider all the facts before making such a difficult decision. If you decide to rent it, ask fair market value and get it rented to good credit worthy people. If you’re going to sell it, ask fair market value and get it sold, leaving this decision to others.